According to Exxon Mobil’s annual energy outlook, in the following decades, the world’s rising need for oil and energy will be met by ample amounts of petroleum sourced both in the US and globally. Exxon is asking the US to end embargoes on crude exports, which were originally created during the Arab oil embargo of 1973. The oil giant believes that the nation is now generating enough crude to become an exporter.
The US’s abundant amounts of oil have created some issues for Exxon and many energy companies: increased production has flooded US demand, causing domestic prices to decrease and gnawing at energy companies’ profits. The US doesn’t allow crude to be exported to other countries, except Canada; however, the government will soon allow natural gas to be exported through terminals to countries that don’t have free-trade agreements with the US.
Exxon’s outlook states that, by 2015, more oil will be tapped in North America than from Organization of the Petroleum Exporting Countries (OPEC), excluding Saudi Arabia. However, by 2040, Exxon foreshadows that OPEC will produce 45% of the world’s petroleum. Exxon’s outlook predicts that the world will use 35% more energy in 2040 than 2010, stemming from growing incomes and populations in developing countries like India and China. Exxon also predicts that oil and gas will supply 60% of energy used in 2040. Exxon’s projections are optimistic, noting that 65% of the world’s crude will remain untouched in 2040.
Lifting this embargo might be met with opposition, as consumers worry that crude exports can lead to rising US gas prices, and environmentalists worry about the environmental consequences of enlarged production. Exxon’s outlook reinforces the split between those who promote fossil fuel emission limits, and those — like Exxon — who deem such limits as impractical.
As guardians of the free-trade market and pragmatism, we believe that US oil companies should be allowed to export (and import) oil and any other energy sources.
Developed and Written by Dr. Subodh Das and Tara Mahadevan
January 2, 2014
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